Saturday, December 9, 2017

Islamabad: Pakistan Telecommunication Authority (PTA) – dynamically engaged in changing telecom landscape of Pakistan – has tackled every new challenge with determination, keeping interest of the country at heart of its regulatory decisions.

The Authority sustains on research in regulation, technical astuteness, harmonizing competition and discharging its social responsibility with the patronage of the Government of Pakistan.

Under patronage of current democratic government, PTA has been actively pursuing its broader objectives and targets for the development of telecom services and protection of consumer rights. It believes that performance of telecom sector is true reflection of its successful regulatory initiatives and reforms.

The Authority in its latest report, highlighting industry issues and way forward said today, Information and Communication Technologies (ICTs) solutions, being offered on mobile broadband, are making a big difference in every walk of life.

However, there are several industry challenges that are needed to be addressed in near future. It is indeed a challenge to keep up with the rapid modernization in telecom systems and to bring latest ICT innovations in Pakistan.

Rationalization of Taxes in telecom sector was a major challenge being faced by industry for past few years. After coordinated efforts of PTA and telecom industry, Withholding Tax has been brought down to 12.5 per cent from 14 per cent. However, the Withholding Tax @ 12.5 per cent on every mobile recharge is still high because majority of subscribers fall below threshold of being a tax payer and hence, cannot get paid amount adjusted in their annual tax returns.

Similarly, Federal Excise Duty (FED) has also been decreased to 17 per cent from 18.5 per cent. However, the tax rates by Provincial Revenue Authorities are still quite high and should be reduced, following the example of Federal Capital.

Harmonization of Federal and Provincial Tax Laws is important to resolve sales tax collection issues and avoid undue litigation between operators and the Federation. Telecom sector should be granted the industrial undertaking status so that the mobile operators are able to adjust the income tax paid at time of import of telecom equipment, which is treated as a final tax liability. High custom duty and other taxes on import of mobile handsets and telecom equipment also impede mobile penetration.

Moreover, the report said the intense price wars among the operators topped with fierce competition with the Over-the-top (OTT) services and grey traffic is shrinking the Average Revenue per User (APRU) of the industry.

Telecom access and expansion is hampered by the lingering Right of Way (RoW) issues, utility infrastructure and procedural delays in the approvals process at provincial government’s level. PTA has exerted tremendous efforts to improve the national and international connectivity of the country by providing regulatory facilitation to interested operators.—APP